The author of the popular Civil Serf blog is reported to have confessed to a Government investigating team.
The unnamed civil servant at the heart of the controversy is said to be a fast-track civil servant who, on her blog, said that she was "just senior enough in my department to really know what's going on, but not senior enough to attract suspicion from my blogging".
She detailed how policies in her department, which has been identified by observers as the Department for Work and Pensions (DWP), were announced more than once to give the impression of activity, and said that senior ministers are lazy, only taking decisions at weekends "because they have their spouse and/or political adviser to do it for them".
Followed closely by political observers, the blog attracted an influential following and was the subject of an investigation to discover its source.
Last week the blog went off-line and a civil servant was reported to have been confronted and admitted authorship. She has been suspended, according to reports.
There is a civil service code of conduct which governs what civil servants can and cannot say in public, and a spokesperson for the DWP told the Daily Mail that it was investigating whether or not any breach of that code had taken place.
Employment law specialist Catherine Barker of Pinsent Masons, the law firm behind OUT-LAW.COM, said that some blogging could be grounds for disciplinary action regardless of the content of any code or agreement, but that employers will find themselves on much stronger ground if they have and communicate a clear policy to employees.
"In the absence of having a clear policy which covers this type of activity an employer hoping to instigate disciplinary action against a member of staff would have to show that the employee has breached one of the implied terms of their employment contract, such as the duty of fidelity, confidentiality, or perhaps trust and confidence," said Barker.
"If a member of staff is openly critical of the employer in a blog, it can be evidence of a breach of trust and justify disciplinary action. Being able to point to a clear communications policy that spells out that it is unacceptable to identify your employer online or bring the employer into disrepute makes this process even easier," she said.
Employers are increasingly faced with the problem of how and whether to regulate employees' communications using ubiquitous publishing technologies such as blogs or social networking sites.
Last year an employee at an accountancy firm in Paris was sued by that firm. Catherine Sanderson wrote about her employer without naming it, but the firm thought she had identified it by publishing a photograph of herself on her blog, La Petite Anglaise. She was sacked but won a year's salary plus costs in compensation for her dismissal.
Barker said that if employers are to take action they must be clear to employees about their policies.
"Employers need to ensure that the ground rules of acceptable behaviour online are firmly established," she said.
"This is particularly true where an employee is posting information in cyberspace in his or her own free time, using their own computer equipment, rather than that belonging to his or her employer."